Used to be promise low and deliver ok, now it's promise ok, and don't meddle with the rhetoric until you have to report. See how that works?
New home sales in Dec should be flat, but at what price, so that 9AM Monday price report should show the beginnings of a 6% roll back zillow has been showing for two months. Follow that dismal report with a Fed hell bent on wrecking the real estate reflation "victory" that got us all the way back to August 2004 prices, now April 2004, and you'll see why tapering is 3 years premature. Can you hear me Yellen yet?
Big bugaboo in the room is the next tapering announcement 29 Jan by Fed's FOMC at the mouth, Bernookie's last day on the podium before he hits the street. Right on the FOMC heels you got claims to reflect all those seasonal workers hitting the streets that mar the jobs "recovery" that's mostly mythological.
Silver is already come off the bottom it's $19-$23 range. Nothing like a trade to make your day.
See if that works.
Jan 27 10:00 AM New Home Sales Dec - NA NA 464K -
Jan 28 8:30 AM Durable Orders Dec - NA NA 3.4% 3.5%
Jan 28 8:30 AM Durable Goods -ex transportation Dec - NA NA 1.2% -
Jan 28 9:00 AM Case-Shiller 20-city Index Nov - NA NA 13.6% -
Jan 28 10:00 AM Consumer Confidence Jan - NA NA 78.1 -
Jan 29 7:00 AM MBA Mortgage Index 01/25 - NA NA 4.7% -
Jan 29 10:30 AM Crude Inventories 01/25 - NA NA 0.990M -
Jan 29 2:00 PM FOMC Rate Decision Jan - NA NA 0.25% -
Jan 30 8:30 AM Initial Claims 01/25 - NA NA 326K -
Jan 30 8:30 AM Continuing Claims 01/18 - NA NA 3056K -
Jan 30 8:30 AM GDP-Adv. Q4 - NA NA 4.1% -
Jan 30 8:30 AM Chain Deflator-Adv. Q4 - NA NA 2.0% -
Jan 30 10:00 AM Pending Home Sales Dec - NA NA 0.2% -
Jan 30 10:30 AM Natural Gas Inventories 01/25 - NA NA -107 bcf -
Jan 31 8:30 AM Personal Income Dec - NA NA 0.2% -
Jan 31 8:30 AM Personal Spending Dec - NA NA 0.5% -
Jan 31 8:30 AM PCE Prices - Core Dec - NA NA 0.1% -
Jan 31 8:30 AM Employment Cost Index Q4 - NA NA 0.4% -
Jan 31 9:45 AM Chicago PMI Jan - NA NA 60.8 59.1
Jan 31 9:55 AM Michigan Sentiment - Final Jan - NA NA 80.4
Sharkey right now 2015 it's Cristie versus Clinton, and this has been a cash oriented XMAS, not plastic. Mastercard and Visa are in for a shock. Wonder how many 1-5% cash back cards are paid off every month, with profits being Chased back for those cards and offerers? I know I put $35 grand on the cards, and get a $550 check back every year thank you very much.
In the meantime gold and silver are at the top of their ranges, and markets are finding little excuse to go positive in 2014.
What's in your wallet?
Today 24 Jan we get a respite from general economic news reporting, other than declines worldwide in me too step with yesterday's selloff. In Rocketship XM, the 1950 scifi quickie, the return trip from a nuclear torn Mars is marred by chief scientist's revelation (Osa Mason) to new hunk boyfriend (played by Lloyd Bridges) that they don't have enough fuel to land due to her miscalculation, and they'll crash and burn on earth. Lloyd frantically replies "but the engines are working perfectly!". She rejoinders, "yes, but at 1/10th capacity".
What a perfect metaphor for the economy, the miscalculation of ending bond buying, and the inevitable crash and burn!. The market is struggling to go higher, waiting for a Fed to save the day by adding more fuel stimulus, and the fuel tank is not only empty of new jobs beyond Micky D level part timers, it's tapering off what little bond fuel remains to keep mortgage rates low, and turning on the Obunglecare drain at breakneck speed, at the worst time. If you don't think we're headed for a crash, wait till a few more blah corporate reports and bleak futures depicted at CC's, and a suffocated real estate buying season after a few looky loos get the message and buy the house they've put off.
Home sales were off in Dec just a smidge, but at what price? 6% lower than peak prices 8 weeks ago--but you wouldn't know that, November prices are all that is being talked to. Wait till the lowered home price fiasco hits the reporting fan late Feb.
In the meantime, yesterday safe havens were gold, silver, and MREITS offering 10% or better, like NLY and CYS. MREITS may take a hit on the lower spread between short term and long term rates, but it's hard to argue they haven't been "discovered" by rank and file, and jumped nearly 3%.
But today reporting takes a break. So am I.
Better than gold, and that's because it pays 14-15% while gold just, well, lies there
I break even today, and all those dividends are now in the profit arena. Why the pop? Simple, in times of stress to the market in general, those with decent dividends soar. Even if the divvy sinks by 50%, it's still far above over the potential left in general market that has risen 30% last year, and struggles on its own with waning stimulus, by a Fed too early to the game.
See how that is working?
If half the mandate of the Fed is to create jobs, and 2/3rds the jobs are created by small companies, the Fed is pushing an agenda favoring small caps and IWM is all small caps, the Fed is literally behind IWM, and you don't fight the Fed. Easy interest rate environment of some time after 6.5% unemployment is reached appears to be smooth sailing as long as PPI/CPI inflation remains low and UNDER Fed's 2% target, and we're deflating, not inflating.
That's easy money all size caps have to borrow to expand or improve business, and that is supposed to mean jobs, and the jobs created so far haven't been all that "good paying". The Fed's mistake of ending tapering too early, putting the brakes on home prices (they've actually fallen 6% since October) shows, that the Fed will learn the foolishness of ending stimulus too soon this next real estate buying and selling season--all of this augers for low interest rate policy to build small business and better jobs for YEARS to come.
No need to denigrate good basic information. Short interest always increases when a stock rises and 2/3 have left both the long and short of it. I suspect those at $26 and below will form the next pressure wave up, as the stock bounces to the upper $20's and hangs there.
The general economy is not helping, which is why tapering stimulus of bond buying lowering mortgage rates is three years premature. 4.2M new hires working part time at Micky D's for $25K a year aren't buying $3500 flat screens, but they may buy a $300 40', so margins and competition remain keen.
BBY needs to get its on line act together like Macy's did. Someday BBY will have many fewer stores, and AMZN will open "showrooms". It's inevitable.
Claims, it gets muddy here. The XMAS hires are on the street but we're talking CONTINUING claims, which may or may not have the recently unemployment group tossed into the street. Amazing how we look when we no longer count those who are unemployed longer than, what is it now, 77 weeks? And that housing PRICE index is going to fall because interest rates have spike one percent, however low historically, they're still TWENTY FIVE PER CENT HIGHER than May 2013, and housing prices go DOWN when mortgage rates go up. When you're espousing not buying the ten year in as much quantity, with another pounding on the nail up against the market balloon, you get bobbles that precede the crash. And Bernookie and the banksters get another chance to whack away at the pin on the market balloon 28-9 Jan.
So here's another chance for everyone to hear how bad December was just after market opening, leading indicators will trigger some kind of pullback.
With any luck without indicators Friday, we'll snap back. And to be truthful, NFLX's 20% pop will be something extraordinary in our market place--it will show this is a market of stocks, not a stock market.
I guess if you have to invest these days, you need to put away the dart board, and have to look.
Lots of people who don't understand clean up trades for the day happen after hours, and you get valuations that are all over the place.
No wonder the stock market is in trouble.
You couldn't short this stock day before Thursday, and after Thursday Friday, the Johnny come latelys waiting for "confirmation" after a 35% drop all dumped on short $26.50 and below. A lot below.
So here you are, short and the stock is showing strength rebounding to the mid $25 levels, and we're off to the races as shorts with a few bucks are dumping, and running out of headroom. There's an awful lot of lowball late to the party shorts underwater, and they're feeding this mini rally for the next three weeks.
We could see $28.5 before $22.5, for a long long time.
The signs have been in our face all year market wide as the employment numbers ditch the ones who've given up, and hire part timers and Micky D salary level serfs as fast as you can say "done with India for now".
Add to that the liability of plastic as exhibited by Target, and you have people buying for cash and paying off credit cards monthly. How cash back cards survive paying one to two percent back on stuff folks pay off every month is the next shoe to fall.
What's in your wallet?
The dumbest thing of all, is folks who DIDN'T READ THE 3RD QTR REPORT WHERE squeezed margins and market share were all predicted by anyone who could read at the fourth grade level.
See how that works?
$24.50 is the gap to be filled, and filled it appears it was. Certainly, margins are compressed by 2/3rds also, and you'll see marginal stores being closed, and sales all year every excuse that can be made. AMZN starts having to pay tax this year, if they pick up that tab in lowered prices, they're in the red. The playing field is leveling, and I am buying on dips. All they have to do, is maintain the dividend and the bounce to $33 is just a few months away.